NexThought Monday – Is Charity: Water the Expedia of Philanthropy?

Expedia doesn’t make planes. It doesn’t run planes and it doesn’t own planes. But it sends millions of people on trips every year. Charity: water doesn’t make, run or own wells. But thousands have been dug on its dime.

The comparison to the travel clearinghouse was made last week by charity: water’s founder, Scott Harrison, in a New York Times Magazine piece by Max Chafkin, who traveled with the aid celebrity and about 50 Silicon Valley startup moguls to Ethiopia to view the non-profit’s wells. Akin to Expedia connecting travelers with airlines, which actually fly the plane, charity: water connects donors’ dollars with local organizations, which dig the wells. Charity: water doesn’t actually do the digging or monitoring itself.

What it does do is send you GPS coordinates of the well that was dug with your cash.

“Charity: water promises to do more than a mere online travel agent does; it claims to verify that the wells its donors buy are actually completed in a timely fashion,” writes Chafkin.

In other words, charity: water shuttles you to the airport, makes sure your plane gets off the ground, lets you monitor the flight in real-time and greets you when you land.

It’s an effective new way of conducting philanthropy and a heck of a lot sexier. But for all its hype, it’s an old way of alleviating poverty.

David Bornstein says charity: water’s message is misleading. In his New York Times’ Fixes column, Bornstein gets at the complexity of solving the water problem, which is a lot larger than traditional give-a-well schemes can possibly handle. The UN estimates 783 million people don’t have access to clean water. That’s 2.5 times the population of the United States and a lot of wells. To make his case, Bornstein profiles the anti-Scott Harrison.

Gary White is the founder of Water.org. White’s approach, after decades of trial and error, no longer involves digging a single well. His tune changed when he saw the graveyard of broken wells in poor communities around the world and started to probe the underlying reasons. As most international development professionals have witnessed, the main issues are almost always the same: no one with the know-how to fix broken wells, no sense of local ownership, a lack of spare parts and no money to buy the spare parts if they were available.

White and Water.org pioneered the idea of water credit, which uses “philanthropy to jump start a market among microfinance organizations so they get into the business of making water and sanitation loans.”

Rather than building a well, Water.org builds a multiplier effect.

Here’s a primer on how it works: Microfinance organizations are educated about the obvious health and sometimes less obvious economic benefits of sanitation. Buying into the concept, they create water-focused loan products at price points families can afford. Families buy supplies to build and maintain their own latrine or well, or perhaps they purchase piping to tap into local water infrastructure. Over time, they pay back the loan. The time families save by not hauling water many miles every day is economically significant: 200 million work hours per day.

“There’s never going to be enough charity in the world to get water to everyone who needs it,” said White.

If charity: water’s philanthropic success were used for a market-driven solution with long-term impact and local ownership, those old-timey well donations could be turned into catalytic game-changing super funds. It seems like Silicon Valley innovators would nerd out even more on that.

Editor’s note: This article originally appeared on Global Envision, a blog focused on market-based solutions to poverty managed by Mercy Corps, a NextBillion Content Partner.